Form 8-K - Current report

LANDSTAR SYSTEM INC 021-238 false 0000853816 0000853816 2025-01-29 2025-01-29

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 8-K

 

 

Current Report

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) January 29, 2025

 

 

 

LANDSTAR SYSTEM, INC.

(Exact name of registrant as specified in its charter)

 

 

 

Delaware		021238		06-1313069
(State or other jurisdiction of incorporation)		(Commission File Number)		(I.R.S. Employer Identification No.)

 

13410 Sutton Park Drive South, Jacksonville, Florida				32224
(Address of principal executive offices)				(Zip Code)

[phone]

(Registrant’s telephone number, including area code)

N/A

(Former name or former address, if changed since last report)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock		LSTR		NASDAQ

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

 

 

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Item 2.02

Results of Operations and Financial Condition

On January 29, 2025, Landstar System, Inc. (“Landstar” or the “Company”) issued a press release announcing results for the fourth quarter of fiscal 2024. A copy of the press release is attached hereto as Exhibit 99.1.

The information contained in Item 7.01 concerning the presentation to Landstar investors is hereby incorporated into this Item 2.02 by reference.

The information furnished under Item 2.02 of this Current Report on Form 8-K, including Exhibit 99.1 hereto, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933.

 

Item 7.01

Regulation FD Disclosure

A slide presentation, dated January 29, 2025, is attached hereto as Exhibit 99.2 and is incorporated herein by reference. The slide presentation provides information that may be referred to by the Company on its conference call with investors scheduled to occur on January 29, 2025 in connection with the Company’s release of results for the fourth quarter of fiscal 2024.

The information furnished under Item 7.01 of this Current Report on Form 8-K, including Exhibit 99.2 hereto, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933.

 

Item 9.01

Financial Statements and Exhibits

 

Exhibits
99.1		Press Release, dated January 29, 2025, of Landstar System, Inc.
99.2		Slide Presentation, dated January 29, 2025, of Landstar System, Inc.
104		Inline XBRL for the cover page of this Current Report on Form 8-K

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

				LANDSTAR SYSTEM, INC.
Date: January 29, 2025				By:		/s/ James P. Todd
				Name:		James P. Todd
				Title:		Vice President, Chief Financial Officer and Assistant Secretary

Exhibit 99.1

 

 

For Immediate Release		January 29, 2025

LANDSTAR SYSTEM REPORTS FOURTH QUARTER

REVENUE OF $1.209B AND EARNINGS PER SHARE OF $1.31

Jacksonville, FL - Landstar System, Inc. (NASDAQ: LSTR) (“Landstar” or the “Company”) today reported basic and diluted earnings per share (“EPS”) of $1.31 in the 2024 fourth quarter on revenue of $1.209 billion. “The Landstar team of independent business owners and employees continued to perform admirably, despite the continuation of a challenging freight backdrop,” said Landstar President and Chief Executive Officer Frank Lonegro. “I was encouraged to see year-over-year quarterly revenue growth for the first time since the 2022 third quarter. The year-over-year revenue growth was achieved via a sequential increase in overall truck pricing as compared to the 2024 third quarter and a strong revenue performance specific to our unsided/platform service offering. We look to build on this revenue per load momentum as we begin the 2025 fiscal year. Our network of Landstar BCOs, agents and employees are optimistic for an improved freight transportation environment and will continue to strive each day to improve our safety performance and deliver great service to our customers.”

Landstar continues to return capital to stockholders through the Company’s stock purchase program and dividends. During the 2024 fiscal year, Landstar purchased approximately 452,000 shares of its common stock at an aggregate cost of $82.1 million and paid $120.5 million to stockholders in the form of cash dividends. The Company is currently authorized to purchase up to an additional 2,547,981 shares of the Company’s common stock under its longstanding share purchase program. Landstar also announced today that its Board of Directors declared a quarterly dividend of $0.36 per share payable on March 11, 2025, to stockholders of record as of the close of business on February 18, 2025.

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LANDSTAR SYSTEM/2

 

		4Q 2024				4Q 2023
Revenue		$	1,209,330			$	1,204,445
Gross profit		$	109,423			$	124,594
Variable contribution		$	166,523			$	178,146
Operating income		$	57,771			$	74,567
Basic and diluted earnings per share		$	1.31			$	1.62

 

(1)   Dollars above in thousands, except per share amounts.

(2)   Please refer to the Consolidated Statements of Income and Reconciliation of Gross Profit to Variable Contribution included below.

Total revenue was $1,209 million in the 2024 fourth quarter, compared to $1,204 million in the 2023 fourth quarter. Truck transportation revenue hauled by independent business capacity owners (“BCOs”) and truck brokerage carriers in the 2024 fourth quarter was $1,081 million, or 89% of revenue, compared to $1,085 million, or 90% of revenue, in the 2023 fourth quarter. Truckload transportation revenue hauled via van equipment in the 2024 fourth quarter was $597 million, compared to $619 million in the 2023 fourth quarter. Truckload transportation revenue hauled via unsided/platform equipment in the 2024 fourth quarter was $362 million, compared to $340 million in the 2023 fourth quarter. Revenue from other truck transportation, which is largely related to power-only services, in each of the 2024 and 2023 fourth quarters was $100 million. Revenue hauled by rail, air and ocean cargo carriers was $107 million, or 9% of revenue, in the 2024 fourth quarter, compared to $89 million, or 7% of revenue, in the 2023 fourth quarter.

The number of loads hauled via truck declined 3.4% in the 2024 fourth quarter as compared to the 2023 fourth quarter. This performance was slightly better than the low-end of the Company’s guidance included in its 2024 third quarter earnings release slide presentation, dated October 29, 2024. Truck revenue per load increased 3.1% in the 2024 fourth quarter as compared to the 2023 fourth quarter, in the upper half of the range of the Company’s previously provided guidance. While actual fourth quarter revenue exceeded the mid-point of the Company’s previously issued guidance, basic and diluted earnings per share fell below the mid-point of the guidance, primarily attributable to a lower than anticipated variable contribution margin and elevated insurance and claim costs, partially offset by a lower than anticipated effective income tax rate. Insurance and claims costs were 6.7% of BCO revenue during the 2024 fourth quarter, well above the Company’s average historical experience from the 2019 fiscal year through the 2023 fiscal year of 4.7%, primarily driven by both increased cargo claim costs related to fraud and theft in the supply chain and increased auto liability claim costs.

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LANDSTAR SYSTEM/3

 

Gross profit in the 2024 fourth quarter was $109 million and variable contribution (defined as revenue less the cost of purchased transportation and commissions to agents) in the 2024 fourth quarter was $167 million. Gross profit in the 2023 fourth quarter was $125 million and variable contribution in the 2023 fourth quarter was $178 million. Reconciliations of gross profit to variable contribution and gross profit margin to variable contribution margin for the 2024 and 2023 fourth quarters and year-to-date periods are provided in the Company’s accompanying financial disclosures.

The Company’s balance sheet continues to be very strong, with cash and short-term investments of approximately $567 million as of December 28, 2024. Trailing twelve-month return on average shareholders’ equity was 20%, and return on invested capital, representing net income divided by the sum of average equity plus average debt, was 18%.

Landstar will provide a live webcast of its quarterly earnings conference call this evening at 4:30 p.m. ET. To access the webcast, visit www.investor.landstar.com; click on “Webcasts,” then click on “Landstar’s Fourth Quarter 2024 Earnings Release Conference Call.” A slide presentation to accompany the webcast presentation is also available on Landstar’s investor relations website at https://investor.landstar.com/.

Contact:

Jim Todd

Chief Financial Officer

904-398-9400

About Landstar:

Landstar System, Inc., is a technology-enabled, asset-light provider of integrated transportation management solutions delivering safe, specialized transportation services to a broad range of customers utilizing a network of agents, third-party capacity providers and employees. Landstar transportation services companies are certified to ISO 9001:2015 quality management system standards and RC14001:2015 environmental, health, safety and security management system standards. Landstar System, Inc. is headquartered in Jacksonville, Florida. Its common stock trades on The NASDAQ Stock Market^® under the symbol LSTR.

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LANDSTAR SYSTEM/4

 

Non-GAAP Financial Measures:

In this earnings release and accompanying financial disclosures, the Company provides the following information that may be deemed non-GAAP financial measures: variable contribution and variable contribution margin. The Company believes variable contribution and variable contribution margin are useful measures of the variable costs that we incur at a shipment-by-shipment level attributable to our transportation network of third-party capacity providers and independent agents in order to provide services to our customers. The Company also believes that it is appropriate to present each of the financial measures that may be deemed a non-GAAP financial measure, as referred to above, for the following reasons: (1) disclosure of these matters will allow investors to better understand the underlying trends in the Company’s financial condition and results of operations; (2) this information will facilitate comparisons by investors of the Company’s results as compared to the results of peer companies; and (3) management considers this financial information in its decision making.

Forward Looking Statements Disclaimer:

The following is a “safe harbor” statement under the Private Securities Litigation Reform Act of 1995. Statements contained in this press release that are not based on historical facts are “forward-looking statements.” This press release contains forward-looking statements, such as statements which relate to Landstar’s business objectives, plans, strategies and expectations. Terms such as “anticipates,” “believes,” “estimates,” “intention,” “expects,” “plans,” “predicts,” “may,” “should,” “could,” “will,” the negative thereof and similar expressions are intended to identify forward-looking statements. Such statements are by nature subject to uncertainties and risks, including but not limited to: an increase in the frequency or severity of accidents or other claims; unfavorable development of existing accident claims; dependence on third party insurance companies; dependence on independent commission sales agents; dependence on third party capacity providers; the impact of the Russian conflict with Ukraine on the operations

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LANDSTAR SYSTEM/5

 

of certain independent commission sales agents, including the Company’s largest such agent by revenue in the 2023 fiscal year; decreased demand for transportation services; U.S. trade relationships; substantial industry competition; disruptions or failures in the Company’s computer systems; cyber and other information security incidents; dependence on key vendors; potential changes in taxes; status of independent contractors; regulatory and legislative changes; regulations focused on diesel emissions and other air quality matters; regulations requiring the purchase and use of zero-emission vehicles; intellectual property; and other operational, financial or legal risks or uncertainties detailed in Landstar’s Form 10-K for the 2023 fiscal year, described in Item 1A Risk Factors, and in other SEC filings from time to time. These risks and uncertainties could cause actual results or events to differ materially from historical results or those anticipated. Investors should not place undue reliance on such forward-looking statements, and the Company undertakes no obligation to publicly update or revise any forward-looking statements.

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LANDSTAR SYSTEM/6

 

Landstar System, Inc. and Subsidiary

Consolidated Statements of Income

(Dollars in thousands, except per share amounts)

(Unaudited)

 

		Fiscal Years Ended								Fiscal Quarters Ended
		December 28,				December 30,				December 28,				December 30,
		2024				2023				2024				2023
Revenue		$	4,819,245			$	5,303,322			$	1,209,330			$	1,204,445
Investment income			14,810				10,141				3,822				3,267
Costs and expenses:
Purchased transportation			3,745,241				4,068,262				945,857				927,028
Commissions to agents			392,751				462,668				96,950				99,271
Other operating costs, net of gains on asset sales/dispositions			58,781				54,191				14,643				13,193
Insurance and claims			113,929				114,241				30,099				27,270
Selling, general and administrative			217,708				211,799				55,095				52,728
Depreciation and amortization			56,738				58,153				12,737				13,655
Total costs and expenses			4,585,148				4,969,314				1,155,381				1,133,145
Operating income			248,907				344,149				57,771				74,567
Interest and debt (income) expense			(5,419	)			(3,946	)			(964	)			(1,867	)
Income before income taxes			254,326				348,095				58,735				76,434
Income taxes			58,380				83,701				12,542				18,447
Net income		$	195,946			$	264,394			$	46,193			$	57,987
Basic and diluted earnings per share		$	5.51			$	7.36			$	1.31			$	1.62
Average basic and diluted shares outstanding			35,538,000				35,920,000				35,328,000				35,804,000
Dividends per common share		$	3.38			$	3.26			$	2.36			$	2.33

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LANDSTAR SYSTEM/7

 

Landstar System, Inc. and Subsidiary

Consolidated Balance Sheets

(Dollars in thousands, except per share amounts)

(Unaudited)

 

		December 28,				December 30,
		2024				2023
ASSETS
Current assets:
Cash and cash equivalents		$	515,018			$	481,043
Short-term investments			51,619				59,661
Trade accounts receivable, less allowance of $12,904 and $11,738			683,841				743,762
Other receivables, including advances to independent contractors, less allowance of $17,812 and $14,010			47,160				43,339
Other current assets			22,229				24,936
Total current assets			1,319,867				1,352,741
Operating property, less accumulated depreciation and amortization of $456,547 and $436,682			311,345				284,300
Goodwill			40,933				42,275
Other assets			141,166				122,530
Total assets		$	1,813,311			$	1,801,846
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Cash overdraft		$	61,033			$	61,541
Accounts payable			383,625				395,980
Current maturities of long-term debt			33,116				27,876
Insurance claims			40,511				41,825
Dividends payable			70,632				71,433
Other current liabilities			84,237				76,569
Total current liabilities			673,154				675,224
Long-term debt, excluding current maturities			69,191				43,264
Insurance claims			62,842				58,922
Deferred income taxes and other non-current liabilities			35,685				40,513
Shareholders’ equity:
Common stock, $0.01 par value, authorized 160,000,000 shares, issued 68,559,269 and 68,497,324			686				685
Additional paid-in capital			255,260				254,642
Retained earnings			2,859,916				2,783,645
Cost of 33,243,196 and 32,780,651 shares of common stock in treasury			(2,131,413	)			(2,048,184	)
Accumulated other comprehensive loss			(12,010	)			(6,865	)
Total shareholders’ equity			972,439				983,923
Total liabilities and shareholders’ equity		$	1,813,311			$	1,801,846

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LANDSTAR SYSTEM/8

 

Landstar System, Inc. and Subsidiary

Supplemental Information

(Unaudited)

 

		Fiscal Years Ended								Fiscal Quarters Ended
		December 28,				December 30,				December 28,				December 30,
		2024				2023				2024				2023
Revenue generated through (in thousands):
Truck transportation
Truckload:
Van equipment		$	2,447,810			$	2,742,281			$	596,573			$	618,588
Unsided/platform equipment			1,455,663				1,490,393				361,910				339,910
Less-than-truckload			99,828				117,683				21,926				26,913
Other truck transportation (1)			343,253				479,173				100,400				99,702
Total truck transportation			4,346,554				4,829,530				1,080,809				1,085,113
Rail intermodal			84,328				98,297				18,347				24,344
Ocean and air cargo carriers			289,902				266,638				88,173				64,280
Other (2)			98,461				108,857				22,001				30,708
		$	4,819,245			$	5,303,322			$	1,209,330			$	1,204,445
Revenue on loads hauled via BCO Independent Contractors (3) included in total truck transportation		$	1,821,989			$	1,998,408			$	447,074			$	454,774
Number of loads:
Truck transportation
Truckload:
Van equipment			1,170,772				1,259,578				282,877				292,711
Unsided/platform equipment			476,815				504,765				114,188				115,294
Less-than-truckload			153,253				175,650				33,907				41,070
Other truck transportation (1)			160,120				201,407				45,568				44,295
Total truck transportation			1,960,960				2,141,400				476,540				493,370
Rail intermodal			27,970				29,620				6,550				7,470
Ocean and air cargo carriers			34,440				32,820				8,320				7,440
			2,023,370				2,203,840				491,410				508,280
Loads hauled via BCO Independent Contractors (3) included in total truck transportation			814,150				898,610				193,510				209,350
Revenue per load:
Truck transportation
Truckload:
Van equipment		$	2,091			$	2,177			$	2,109			$	2,113
Unsided/platform equipment			3,053				2,953				3,169				2,948
Less-than-truckload			651				670				647				655
Other truck transportation (1)			2,144				2,379				2,203				2,251
Total truck transportation			2,217				2,255				2,268				2,199
Rail intermodal			3,015				3,319				2,801				3,259
Ocean and air cargo carriers			8,418				8,124				10,598				8,640
Revenue per load on loads hauled via BCO Independent Contractors (3)		$	2,238			$	2,224			$	2,310			$	2,172
Revenue by capacity type (as a % of total revenue):
Truck capacity providers:
BCO Independent Contractors (3)			38	%			38	%			37	%			38	%
Truck Brokerage Carriers			52	%			53	%			52	%			52	%
Rail intermodal			2	%			2	%			2	%			2	%
Ocean and air cargo carriers			6	%			5	%			7	%			5	%
Other			2	%			2	%			2	%			3	%
										December 28,				December 30,
										2024				2023
Truck Capacity Providers
BCO Independent Contractors (3)											8,082				9,024
Truck Brokerage Carriers:
Approved and active (4)											43,718				49,111
Other approved											26,527				27,524
											70,245				76,635
Total available truck capacity providers											78,327				85,659
Trucks provided by BCO Independent Contractors (3)											8,843				9,809

 

(1)

Includes power-only, expedited, straight truck, cargo van, and miscellaneous other truck transportation revenue generated by the transportation logistics segment. Power-only refers to shipments where the Company furnishes a power unit and an operator but not trailing equipment, which is typically provided by the shipper or consignee.

(2)	Includes primarily reinsurance premium revenue generated by the insurance segment and intra-Mexico transportation services revenue generated by Landstar Metro.

(3)	BCO Independent Contractors are independent contractors who provide truck capacity to the Company under exclusive lease arrangements.

(4)	Active refers to Truck Brokerage Carriers who moved at least one load in the 180 days immediately preceding the fiscal quarter end.

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LANDSTAR SYSTEM/9

 

Landstar System, Inc. and Subsidiary

Reconciliation of Gross Profit to Variable Contribution

(Dollars in thousands)

(Unaudited)

		Fiscal Years Ended								Fiscal Quarters Ended
		December 28, 2024				December 30, 2023				December 28, 2024				December 30, 2023
Revenue		$	4,819,245			$	5,303,322			$	1,209,330			$	1,204,445
Costs of revenue:
Purchased transportation			3,745,241				4,068,262				945,857				927,028
Commissions to agents			392,751				462,668				96,950				99,271
Variable costs of revenue			4,137,992				4,530,930				1,042,807				1,026,299
Trailing equipment depreciation			27,950				31,319				7,186				7,079
Information technology costs (1)			22,744				25,486				4,629				5,695
Insurance-related costs (2)			115,764				116,069				30,642				27,585
Other operating costs			58,781				54,191				14,643				13,193
Other costs of revenue			225,239				227,065				57,100				53,552
Total costs of revenue			4,363,231				4,757,995				1,099,907				1,079,851
Gross profit		$	456,014			$	545,327			$	109,423			$	124,594
Gross profit margin			9.5	%			10.3	%			9.0	%			10.3	%
Plus: other costs of revenue			225,239				227,065				57,100				53,552
Variable contribution		$	681,253			$	772,392			$	166,523			$	178,146
Variable contribution margin			14.1	%			14.6	%			13.8	%			14.8	%

 

(1)

Includes costs of revenue incurred related to internally developed software including ASC 350-40 amortization, implementation costs, hosting costs and other support costs utilized to support the Company’s independent commission sales agents, third party capacity providers, and customers, included as a portion of depreciation and amortization and of selling, general and administrative in the Company’s Consolidated Statements of Income.

(2)

Primarily includes (i) insurance premiums paid for commercial auto liability, general liability, cargo and other lines of coverage related to the transportation of freight; (ii) the related cost of claims incurred under those programs; and (iii) brokerage commissions and other fees incurred relating to the administration of insurance programs available to BCO Independent Contractors that are reinsured by the Company, which are included in selling, general and administrative in the Company’s Consolidated Statements of Income.

Exhibit 99.2 Landstar System, Inc. 4Q 2024 Earnings Conference Call Date

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4Q 2024 Forward-Looking Statements Disclaimer The following is a “safe harbor” statement under the Private Securities Litigation Reform Act of 1995. Statements made in this slide presentation that are not based on historical facts are “forward-looking statements.” This presentation may make certain statements containing forward-looking statements, such as statements which relate to Landstar’s business objectives, plans, strategies and expectations. Such statements are by nature subject to uncertainties and risks, including but not limited to: the operational, financial or legal risks or uncertainties detailed in Landstar’s Form 10-K for the 2023 fiscal year, described in the section Risk Factors, and other SEC filings from time to time. These risks and uncertainties could cause actual results or events to differ materially from historical results or those anticipated. Investors should not place undue reliance on such forward-looking statements, and the Company undertakes no obligation to publicly update or revise any forward-looking statements. 2

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4Q 2024 Non-GAAP Financial Measures In this slide presentation, the Company provides the following information that may be deemed a non-GAAP financial measure: variable contribution, variable contribution margin and operating income as a percentage of variable contribution. Management believes variable contribution and variable contribution margin are useful measures of the variable costs that we incur at a shipment- by-shipment level attributable to our transportation network of third-party capacity providers and independent agents in order to provide services to our customers. Management believes that operating income as a percentage of variable contribution is a useful measure as: (i) variable costs of revenue for a significant portion of the Company’s business are highly influenced by short-term market-based trends in the freight transportation industry, whereas other costs, including other costs of revenue, are much less impacted by short-term freight market trends; and (ii) this measure is meaningful to investors’ evaluations of the Company’s management of costs attributable to operations other than the purely variable costs associated with purchased transportation and commissions to agents that the Company incurs to provide services to our customers. Management also believes that it is appropriate to present each of the financial measures that may be deemed a non-GAAP financial measure, as referred to above, for the following reasons: (1) disclosure of these matters will allow investors to better understand the underlying trends in the Company’s financial condition and results of operations; (2) this information will facilitate comparisons by investors of the Company’s results as compared to the results of peer companies; and (3) management considers this financial information in its decision making. A tabulation of the expenses identified as costs of revenue as well as a reconciliation of gross profit to variable contribution and gross profit margin to variable contribution margin for the 2024 and 2023 fourth quarters and fiscal year periods is included in this slide presentation within the Appendix. 3

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4Q 2024 Executive Summary Frank Lonegro Chief Executive Officer 4

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CEO Perspective Slide header R E S U L T S H I G H L I G H T S Dollars in Millions (except per share amounts) 4Q revenue performance • First year over year quarterly revenue growth since 3Q 2022 • 6% year over year revenue growth on our Metric 4Q 2024 4Q 2023 Chg. unsided/platform service offering • 4Q 2024 achieved a 1% sequential increase in truck revenue per load Revenue $ 1,209.3 $ 1,204.4 0.4% Strong Balance Sheet • Returned meaningful capital to stockholders during 2024 Operating Income $ 57.8 $ 74.6 (22.5%) Investing through the cycle • Supporting our network of entrepreneurs with investment in leading-edge technology Earnings per Share $ 1.31 $ 1.62 (19.1%) and new trailing equipment 5

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Landstar Network and 4Q Operating Results L A N D S T A R N E T W O R K 4Q R E S U L T S Agents Customers Capacity Employees $1.08B Truck Revenue ~1,050 23,000+ 78,000+ ~1,400 477K Truck Loadings $2,268 Truck Revenue per Load 485 Million $ Agents 8,843 BCO Trucks 70,245 Carriers 17,600+ Trailers DOT Accidents 0.59 per Million Miles** ** Based on 2024 fiscal year; See definition of DOT accidents within the Appendix 6

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Truck Capacity All information is provided as of the end of the applicable period A V A I L A B L E T R U C K C A P A C I T Y P R O V I D E R S Type of Capacity Dec 28, 2024 Dec 30, 2023 BCO Independent Contractors 8,082 9,024 Truck Brokerage Carriers (1) Approved and Active 43,718 49,111 Other Approved 26,527 27,524 Total Truck Brokerage Carriers 70,245 76,635 Total Available Truck Capacity Providers 78,327 85,659 Trucks Provided by BCO Independent Contractors 8,843 9,809 (1) Active refers to truck brokerage carriers who hauled freight for Landstar in the 180-day period immediately preceding the period end. Note: Fuel surcharges billed to customers on freight hauled by BCO Independent Contractors, which are paid 100% to the BCO and not included in either revenue or the cost of purchased transportation, were $252.6 million and $324.4 million in the 2024 and 2023 fiscal year periods, respectively, and $55.4 million and $79.5 million in the 2024 and 2023 fourth quarters, respectively. 7

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4Q 2024 Financial Results Jim Todd Chief Financial Officer 8

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Revenue Slide header Dollars in Millions R E S U L T S V A R I A N C E (1) (2) Revenue Source Rate Vol. Chg. $1,209.3 $1,204.4 Truck 3.1% (3.4%) (0.4%) Rail Intermodal (14.1%) (12.3%) (24.6%) Ocean/Air 22.7% 11.8% 37.2% Insurance Premiums N/A N/A (12.4%) Total Revenue—— 0.4% 4Q 2024 4Q 2023 (1) Percentage change in rate is calculated on a revenue per load basis. (2) Percentage change in volume is calculated on the number of loads hauled. 9

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Revenue Variances by Industry Served with Revenue Share Indicated Amounts in Percent Transportation logistics revenue up 1% Y-O-Y Revenue Share Y-O-Y Change 4Q 2024 4Q 2023 Market Segment in Revenue 27.4 27.8 Consumer Durables (1) 13.7 13.7 Machinery 1 10.1 11.6 Automotive (12) 9.4 8.1 Building Products 17 6.5 7.6 AA&E, Hazmat (14) 5.0 4.9 Metals 3 3.0 2.3 Energy 35 2.3 2.4 Substitute Line Haul (1) 22.6 21.6 Other 9 10

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(1) (2) Gross Profit and Variable Contribution with Associated Margins Dollars in Millions R E S U L T S C H A N G E I N V C M A R G I N Gross Variable Amounts in % 4Q Profit Contribution 2023 14.8 $178.1 $166.5 (3) Revenue – Fixed (0.3) $124.6 $109.4 Revenue – Variable (0.5) Change in Mix/Other (0.2) 9.0% 10.3% 13.8% 14.8% 4Q 2024 4Q 2023 4Q 2024 4Q 2023 2024 13.8 (1) Gross profit equals revenue less the cost of purchased transportation, commissions to agents and other costs of revenue. Gross profit margin equals gross profit divided by revenue. (2) Variable contribution (VC) equals revenue less the cost of purchased transportation and commissions to agents. Variable contribution margin equals VC divided by revenue. (3) Revenue on transactions where the Company’s variable contribution margin was based on a contractually pre-determined percentage of revenue accounted for 42% and 43% of revenue in the 2024 and 2023 fourth quarters, respectively. 11

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Operating Income Slide header as a Percentage of Gross Profit and Variable Contribution Dollars in Millions R E S U L T S C H A N G E I N P E R C E N T A G E of Variable Contribution Operating Percentage of Amounts in % 4Q Income Gross Profit Variable Contribution 2023 41.9) 59.8% $74.6 Other operating costs (1.4) 52.8% $57.8 41.9% Insurance and claims (2.3) 34.7% SG&A (3.5) Depreciation and amortization 0.0 4Q 2024 4Q 2023 4Q 2024 4Q 2023 4Q 2024 4Q 2023 2024 34.7 12

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Key Balance Sheet and Cash Flow Statistics Dollars in Millions (1) N E T C A S H S O U R C E S / U S E S O F C A S H (2) Year-to-date as of date indicated with Debt to Capital as of date indicated Cash Flow Type Dec 28, 2024 Dec 30, 2023 Cash flow from operations $ 286.6 $ 393.6 $469.6 $464.3 Cash capital expenditures $ 31.0 $ 25.7 (3) Free cash flow $ 255.6 $ 368.0 Share repurchases $ 81.4 $ 53.9 Dividends paid $ 120.5 $ 117.1 R E T U R N S Trailing 12 months as of date indicated Return Type Dec 28, 2024 Dec 30, 2023 Equity 20% 27% 10% 7% Invested Capital 18% 25% Assets 11% 14% Dec 28, 2024 Dec 30, 2023 (1) Net cash is defined as cash and cash equivalents plus short term investments less outstanding debt. (2) Capital is defined as total debt plus total shareholders’ equity. (3) Free cash flow is defined as cash flow from operations less cash capital expenditures. 13

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4Q 2024 1Q Guidance & Closing Remarks Frank Lonegro Chief Executive Officer 14

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1Q Guidance Slide header Ü Consolidated Revenue of $1.075 - $1.175 billion – Truck Loads 7% below to 2% below prior year – Truck Revenue per Load 2% below to 3% above prior year Ü Earnings per Share of $1.05 — $1.25 – Insurance Expense to approximate 6.0% of BCO revenue – Effective Income Tax Rate of 24.5% 15

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4Q 2024 Appendix 16

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Revenue Breakdown by Service Type P E R C E N T A G E O F R E V E N U E 4Q 2 0 2 4 by Service Type 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% T R U C K T R A N S P O R T A T I O N T R U C K L O A D Van — 49%, Unsided/Platform — 30% LTL — 2% OTHER TRUCK — 8% RAIL INTERMODAL — 2% OCEAN / AIR CARGO — 7% ALL OTHER — 2% C H A N G E I N S H A R E S I N C E 4 Q 2 0 2 3 Van Unsided/ Platform Other Truck Rail Ocean/ All LTL Equipment Equipment Transportation Intermodal Air cargo Other 51% Ü 49% 28% Ü 30% 2% Ü 2% 8% Ü 8% 2% Ü 2% 5% Ü 7% 3% Ü 2% 17

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Truckload Loadings and Revenue per Truckload Trends V A N U N S I D E D / P L A T F O R M NUMBER OF LOADS NUMBER OF LOADS 400,000 150,000 300,000 100,000 200,000 50,000 100,000 0 0 REVENUE PER LOAD REVENUE PER LOAD $3,500 $3,500 $3,000 $3,000 $2,500 $2,500 $2,000 $2,000 $1,500 $1,500 $1,000 $1,000 $500 $500 $- $- 18

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Revenue – Fiscal Year Slide header Dollars in Millions R E S U L T S V A R I A N C E (1) (2) Revenue Source Rate Vol. Chg. $5,303.3 Truck (1.7%) (8.4%) (10.0%) $4,819.2 Rail Intermodal (9.2%) (5.6%) (14.2%) Ocean/Air 3.6% 4.9% 8.7% Insurance Premiums N/A N/A (12.7%) Total Revenue—— (9.1%) 2024 2023 (1) Percentage change in rate is calculated on a revenue per load basis. (2) Percentage change in volume is calculated on the number of loads hauled. 19

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Gross Profit and Variable Contribution – Fiscal Year with Associated Margins Dollars in Millions R E S U L T S C H A N G E I N V C M A R G I N Gross Variable Amounts in % 2024 Profit Contribution 2023 14.6 $772.4 (1) Revenue – Fixed 0.0 $681.3 $545.3 $456.0 Revenue – Variable (0.4) Change in Mix/Other (0.1) 9.5% 10.3% 14.1% 14.6% 2024 2023 2024 2023 2024 14.1 (1) Revenue on transactions where the Company’s variable contribution margin was based on a contractually pre-determined percentage of revenue accounted for 43% of revenue in both the 2024 and 2023 fiscal year periods, respectively. 20

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Operating Income – Fiscal Year Slide header as a Percentage of Gross Profit and Variable Contribution Dollars in Millions R E S U L T S C H A N G E I N P E R C E N T A G E of Variable Contribution Operating Percentage of Amounts in % 2024 Income Gross Profit Variable Contribution 2023 44.6) 63.1% $344.1 54.6% Other operating costs (1.6) 44.6% $248.9 Insurance and claims (1.1) 36.5% SG&A (4.6) Depreciation and amortization (0.8) 2024 2023 2024 2023 2024 2023 2024 36.5 21

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Reconciliation of Gross Profit to Variable Contribution Dollars in Thousands Fiscal Years Ended Fiscal Quarters Ended Dec 28, Dec 30, Dec 28, Dec 30, 2024 2023 2024 2023 Revenue $ 4,819,245 $ 5,303,322 $ 1,209,330 $ 1,204,445 Costs of revenue: Purchased transportation 3 ,745,241 4 ,068,262 945,857 927,028 Commissions to agents 392,751 462,668 96,950 99,271 Variable costs of revenue 4 ,137,992 4,530,930 1 ,042,807 1,026,299 Trailing equipment depreciation 27,950 31,319 7,186 7,079 Information technology costs (1) 22,744 25,486 4,629 5,695 Insurance-related costs (2) 115,764 116,069 30,642 27,585 Other operating costs 58,781 54,191 14,643 13,193 Other costs of revenue 225,239 227,065 57,100 53,552 Total costs of revenue 4,363,231 4,757,995 1,099,907 1 ,079,851 Gross profit $ 456,014 $ 5 45,327 $ 109,423 $ 1 24,594 Gross profit margin 9.5% 10.3% 9.0% 10.3% Plus: other costs of revenue 225,239 227,065 57,100 53,552 Variable contribution $ 681,253 $ 7 72,392 $ 1 66,523 $ 178,146 Variable contribution margin 14.1% 14.6% 13.8% 14.8% (1) Includes costs of revenue incurred related to internally developed software including ASC 350-40 amortization, implementation costs, hosting costs and other support costs utilized to support the Company’s independent commission sales agents, third party capacity providers, and customers, included as a portion of depreciation and amortization and of selling, general and administrative in the Company's Consolidated Statements of Income. (2) Primarily includes (i) insurance premiums paid for commercial auto liability, general liability, cargo and other lines of coverage related to the transportation of freight; (ii) the related cost of claims incurred under those programs; and (iii) brokerage commissions and other fees incurred relating to the administration of insurance programs available to BCO Independent Contractors that are reinsured by the Company, which are included in selling, general and administrative in the Company’s Consolidated Statements of Income. 22

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Free Cash Flow with Stock Purchases and Dividends Dollars and Shares in Millions 5 – Y E A R S U M M A R Y Cash Flow Item 2020 2021 2022 2023 2024 Cash flow from operations $ 211 $ 277 $ 623 $ 394 $ 287 (1) Cash capital expenditures $ 34 $ 24 $ 26 $ 26 $ 31 Free cash flow $ 177 $ 253 $ 597 $ 368 $ 256 Share repurchases $ 116 $ 123 $ 286 $ 54 $ 81 Dividends paid $ 110 $ 112 $ 116 $ 117 $ 120 (2) Common share count 38.4 37.7 35.9 35.7 35.3 (1) Cash capital expenditures includes purchases of operating property and, for fiscal year 2020, consideration paid for acquisition of a business. (2) Common share count as of the end of the applicable period. 23

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(1) DOT Accident Frequency per Million Miles Traveled by BCOs 5 – Y E A R S U M M A R Y 0.70 0.65 0.65 0.62 0.60 0.59 0.60 0.57 0.55 0.50 2020 2021 2022 2023 2024 (1) A “DOT Accident” is defined, consistent with U.S. 49 CFR 390.5T, as an occurrence involving a commercial motor vehicle operating on a highway in interstate or intrastate commerce that results in a fatality, a bodily injury to a person who, as a result of the injury, immediately receives medical treatment away from the scene of the accident, or one or more motor vehicles incurring disabling damage as a result of the accident, requiring the motor vehicle(s) to be transported away from the scene by a tow truck or by other motor vehicle, but does not include an occurrence involving only boarding and alighting from a stationary motor vehicle or an occurrence involving only the loading or unloading of cargo. 24

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Landstar System, Inc. 4Q 2024 Earnings Conference Call Date

Document and Entity Information	Jan. 29, 2025
Cover [Abstract]
Entity Registrant Name	LANDSTAR SYSTEM INC
Entity File Number	021-238
Amendment Flag	false
Entity Central Index Key	0000853816
Document Type	8-K
Document Period End Date	Jan. 29, 2025
Entity Incorporation State Country Code	DE
Entity Tax Identification Number	06-1313069
Entity Address, Address Line One	13410 Sutton Park Drive South
Entity Address, City or Town	Jacksonville
Entity Address, State or Province	FL
Entity Address, Postal Zip Code	32224
City Area Code	(904)
Local Phone Number	398-9400
Written Communications	false
Soliciting Material	false
Pre Commencement Tender Offer	false
Pre Commencement Issuer Tender Offer	false
Security 12b Title	Common Stock
Trading Symbol	LSTR
Security Exchange Name	NASDAQ
Entity Emerging Growth Company	false

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